FinanceAsia.com, 6 Jan 2009, Rupert Walker
Economists fear that the Lion City will fall into the worst recession in its history, while hope rests on a resurgence of intra-regional trade.
Where Singapore leads, other Asian countries must fear to follow. Often considered Asia’s bell-weather economy, the Lion City continues to shock its neighbours and economists with data that casts a murky cloud over the region. The Singapore slump is a cocktail that induces an immediate and thunderous New Year hangover.
On Friday, the Singapore government cut its GDP forecast for 2009 to a range of -2% to 1% compared to its projection of between -1% and 2% made in November. The revision came after it announced a contraction of 2.6% in the fourth quarter from a year earlier. It cited a worsening global economic crisis, manifested by sharp falls in global demand, trade and investment.
“This will very likely be the worst recession in Singapore’s history,” says Citi economist, Kit Wei Zheng. “We’re forecasting a GDP contraction of 2.8% this year; while in 1998, during the Asian crisis, GDP fell 1.4% and in the recession after the bursting of the dotcom bubble in 2001 it declined by 2.4%.”
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